Gas Price Break: Walmart (WMT)
Walmart’s (WMT) low prices attract plenty of shoppers whose budgets are about as tight as can be. That’s why rising gas prices always hurt Walmart’s sales. Every penny put in the tank is a penny less available for spending at the world’s largest retailer.
There’s also the case that a significant number of Walmart’s traffic comes from folks who live pretty far away. Imagine that your nearest Walmart is a 30-minute drive. That comes to an hour round-trip, which eats up a lot of gas and limits the number of trips customers take to their local Walmarts.
Indeed, a couple of years ago, Walmart said that one in five Walmart moms list gasoline as a top expense behind housing and car payments. Lower gas prices will help boost Walmart’s same-store sales, total revenue and, ultimately, the bottom line. That’s always good for the share price.